Accounting Policies of Nath Pulp & Paper Mills Ltd. Company

Mar 31, 2014

A. GENERAL:

The financial statements are prepared on historical cost basis (except
for revaluation of certain fixed assets) in accordance with applicable
Accounting Standards issued by the Companies (Accounting Standards)
Rule, 2006, relevant provision of the Companies Act,1956 and on the
accounting principles of a going concern. The Company follows the
mercantile system of accounting and recognizes income and expenditure
on accrual basis except those with significant uncertainties.

All assets and liabilities have been classified as current or
non-current as per the company''s normal operating cycle and other
criteria set out in the Schedule VI to The Companies Act, 1956. Based
on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the company has ascertained its operating cycle as twelve
months for the purpose of current and non-current classification of
assets and liabilities.

B. USE OF ESTIMATES:

The preparation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires Management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosures of contingent liabilities on the
date of financial statements and reported amounts of revenue and
expenses for that year. Actual results could differ from these
estimates. Difference between the actual results and estimates are
recognized in the period in which the results are known/ materialized.

C. REVENUE RECOGNITION:

Revenue from sale of goods is recognized when significant risks and
rewards of ownership in the goods are transferred to the buyer as per
the terms of the contract. Sales are net of sales returns, trade and
other discounts, sales taxes and excise duties.

D. INVENTORIES:

Items of inventories are valued at lower of the cost and net realizable
value. Cost is assigned on moving weighted average basis. Obsolete,
defective and unserviceable stocks are provided for, if any.

Finished goods and work-in-process include costs incurred in bringing
the inventories to their present location and condition.

E. FIXED ASSETS AND DEPRECIATION:

Fixed Assets are stated at cost except Land, Building certain Plant &
Machinery which were revalued on 30th June, 1994 and are stated at
revalued cost less depreciation, wherever applicable.

Depreciation on assets is provided on Written down Value method at the
rates and in the manner specified in Schedule XIV to the Companies Act,
1956.

Depreciation on machinery spares of the nature of capital spares and
having irregular use is provided prospectively over a period, not
exceeding the useful life of the asset to which they relate.

Depreciation on Fixed Assets added / disposed of during the year, is
provided for on pro-rata basis with reference to the month of addition
/ disposal / discarding.

F. CAPITAL WORK-IN-PROGRESS:

Expenditure related to and incurred during implementation of expansion
cum modernization projects are included under Capital Work-in-Progress
and the same are capitalized under the appropriate heads on completion
of the project.

G. IMPAIRMENT OF ASSETS:

In accordance with AS 28 on ''Impairment of Assets'' issued by the
Institute of Chartered Accountants of India, where there is an
indication of impairment of the Company''s assets related to cash
generating units, the carrying amounts of such assets are reviewed at
each balance sheet date to determine whether there is any impairment.
The recoverable amount of such assets is estimated as the higher of its
net selling price and its value in use. An impairment loss is
recognized whenever the carrying amount of such assets exceeds its
recoverable amount. Impairment loss is recognized in the profit and
loss account. If at the

balance sheet date there is any indication that a previously assessed
impairment loss no longer exists, then such loss is reversed and the
assets are restated to that effect.

H. TRANSACTIONS IN FOREIGN CURRENCY:

Transactions in foreign currency are recorded at the rate of exchange
in force on the date of the transactions. Current assets, current
liabilities and borrowings denominated in foreign currency are
translated at the exchange rate prevalent at the date of the Balance
Sheet. The resultant gain/loss are recognized in the Statement of
Profit & Loss, except in cases where they relate to the acquisition of
fixed assets in which case they are adjusted to the carrying cost of
such assets.

I. EMPLOYEE BENEFITS:

A) Defined Contribution Plan:-

The company has defined contribution plan namely Provident Fund,
administered by the Regional Provident Fund Commissioner. Regular
contributions made to Provident Fund are charged to the Statement of
Profit and Loss. The company has no further obligation beyond making
its contribution on monthly basis.

B) Defined Benefit Plan:-

The company provides for gratuity, a defined benefit plan (the
"Gratuity Plan") covering eligible employees in accordance with the
Payment of Gratuity Act, 1972. The gratuity plan provides a lump sum
payment to vested employees on retirement, death, incapacitation or
termination of employment, of an amount based on the respective
employee''s salary and the tenure of employment. The Company''s liability
is actuarially determined at the end of each year. Actuarial
losses/gains are recognized in the Statement of Profit and Loss in the
year in which they arise.

C) Compensated Absences:-

The employees of the company are entitled to leave as per the leave
policy of the company. The liability for the compensated absences is
provided on the basis of valuation, carried out by an independent
actuary. Gains and losses arising out of actuarial valuations are
recognized immediately in the Statement of Profit and Loss as income or
expense.

J. INCOME TAX:

Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961.

Deferred tax is recognized for all the timing differences, subject to
the consideration of prudence in respect of deferred tax assets.
Deferred tax assets are recognized and carry forward only to the extent
that there is a reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
realized. Deferred tax assets and liabilities are measured using the
tax rates and tax laws that have been enacted or substantively enacted
by the Balance Sheet date. At each Balance Sheet date, the group
reassesses unrecognized deferred tax assets, if any.

Current tax assets and current tax liabilities are offset when there is
a legally enforceable right to set off the recognized amounts and there
is an intention to settle the asset and liability on a net basis.
Deferred tax assets and deferred tax liabilities are offset when there
is a legally enforceable right to set off assets against liabilities
representing current tax and where the deferred tax assets and the
deferred tax liabilities relate to taxes on income levied by the same
governing taxation laws.

K. GOVERNMENT GRANTS:

Grants are accounted for where it is reasonably certain that the
ultimate collection will be made.

Grants relating to Fixed Assets are shown as deduction from the gross
value of the fixed assets and those of the nature of Project Capital
Subsidy are credited to capital reserve. >

L. BORROWING COSTS:

Borrowing cost attributable to the acquisition and construction of
qualifying fixed assets are capitalized as part of the cost of such
asset up to the date when such asset is ready for its intended use.
Other borrowing costs are charged to the Profit & Loss Account.

M. CONTINGENT LIABILITIES / ASSETS AND PROVISIONS

Contingent Liabilities in respect of show cause notices received are
considered only when they are converted into demands. Contingent
Liabilities under various fiscal laws include those in respect of which
the Company / Department is in appeal. A provision is made based on a
reliable estimate when it is probable that an outflow of resources
embodying economic benefits will be required to settle an obligation.
Contingent Liabilities are disclosed in notes to financial statements.
Contingent assets are neither recognized nor disclosed in the financial
statements.

N. EARNING PER SHARE

Basic earning per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. Earnings
considered in ascertaining the company''s earnings per share are the net
profit or loss for the period after deducting preference dividends and
any attributable tax thereto for the period.

The weighted average number of equity shares outstanding during the
period and for all periods presented is adjusted for events, such as
bonus shares, other than the conversion of potential equity shares that
have changed the number of equity shares outstanding, without a
corresponding change in resources. For the purpose of calculating
diluted earnings per share, the net profit or loss for the period
attributable to equity shareholders and the weighted average number of
shares outstanding during the period is adjusted for the effects of all
dilutive potential equity shares.

Mar 31, 2013

A. GENERAL:

The financial statements are prepared on historical cost basis (except
for revaluation of certain fixed assets) in accordance with applicable
Accounting Standards issued by the Companies (Accounting Standards)
Rule, 2006, relevant provision of the Companies Act, 1956 and on the
accounting principles of a going concern. The Company follows the
mercantile system of accounting and recognizes income and expenditure
on accrual basis except those with significant uncertainties.

All assets and liabilities have been classified as current or
non-current as per the company''s normal operating cycle and other
criteria set out in the Schedule VI to The Companies Act, 1956. Based
on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the company has ascertained its operating cycle as twelve
months for the purpose of current and non-current classification of
assets and liabilities.

B. USE OF ESTIMATES:

The preparation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires Management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosures of contingent liabilities on the
date of financial statements and reported amounts of revenue and
expenses for that year. Actual results could differ from these
estimates. Difference between the actual results and estimates are
recognized in the period in which the results are known/ materialized.

C. REVENUE RECOGNITION:

Revenue from sale of goods is recognized when significant risks and
rewards of ownership in the goods are transferred to the buyer as per
the terms of the contract. Sales are net of sales returns, trade and
other discounts, sales taxes and excise duties.

D. INVENTORIES:

Items of inventories are valued at lower of the cost and net realizable
value. Cost is assigned on moving weighted average basis. Obsolete,
defective and unserviceable stocks are provided for, if any.

Finished goods and work-in-process include costs incurred in bringing
the inventories to their present location and condition.

E. FIXED ASSETS AND DEPRECIATION:

Fixed Assets are stated at cost except Land, Building and Plant &
Machinery which were revalued on 30th June, 1994 and are stated at
revalued cost less depreciation, wherever applicable.

Depreciation on assets is provided on Written down Value method at the
rates and in the manner specified in Schedule XIV to the Companies Act,
1956.

Depreciation on machinery spares of the nature of capital spares and
having irregular use is provided prospectively over a period, not
exceeding the useful life of the asset to which they relate.

Depreciation on Fixed Assets added / disposed of during the year, is
provided for on pro-rata basis with reference to the month of addition
/ disposal / discarding.

F. CAPITAL WORK-IN-PROGRESS:

Expenditure related to and incurred during implementation of expansion
cum modernization projects are included under Capital Work-in-Progress
and the same are capitalized under the appropriate heads on completion
of the project.

G. IMPAIRMENT OF ASSETS:

In accordance with AS 28 on ''Impairment of Assets'' issued by the
Institute of Chartered Accountants of India, where there is an
indication of impairment of the Company''s assets related to cash
generating units, the carrying amounts of such assets are reviewed at
each balance sheet date to determine whether there is any impairment.
The recoverable amount of such assets is estimated as the higher of its
net selling price and its value in use. An impairment loss is
recognized whenever the carrying amount of such assets exceeds its
recoverable amount. Impairment loss is recognized in the profit and
loss account. If at the balance sheet date there is any indication that
a previously assessed impairment loss no longer exists, then such loss
is reversed and the assets are restated to that effect.

H. TRANSACTIONS IN FOREIGN CURRENCY:

Transactions in foreign currency are recorded at the rate of exchange
in force on the date of the transactions. Current assets, current
liabilities and borrowings denominated in foreign currency are
translated at the exchange rate prevalent at the date of the Balance
Sheet. The resultant gain/loss are recognized in the Statement of
Profit & Loss, except in cases where they relate to the acquisition of
fixed assets in which case they are adjusted to the carrying cost of
such assets.

I. EMPLOYEE BENEFITS:

A) Defined Contribution Plan:-

The company has defined contribution plan namely Provident Fund,
administer by the Regional Provident Fund Commissioner. Regular
contributions made to Provident Fund are charged to the Statement of
Profit and Loss. The company has no further obligation beyond making
its contribution on monthly basis.

B) Defined Benefit Plan:-

The company provides for gratuity, a defined benefit plan (the
"Gratuity Plan") covering eligible employees in accordance with the
Payment of Gratuity Act, 1972. The gratuity plan provides a lump sum
payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective
employee''s salary and the tenure of employment. The Company''s liability
is actuarially determined at the end of each year. Actuarial
losses/gains are recognized in the Statement of Profit and Loss in the
year in which they arise.

C) Compensated Absences:-

The employees of the company are entitled to leave as per the leave
policy of the company. The liability for the compensated absences is
provided on the basis of valuation, carried out by an independent
actuary. Gains and losses arising out of actuarial valuations are
recognized immediately in the Statement of Profit and Loss as income or
expense.

J. INCOME TAX:

Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961,

Deferred tax is recognized for all the timing differences, subject to
the consideration of prudence in respect of deferred tax assets.
Deferred tax assets are recognized and carry forward only to the extent
that there is a reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
realized. Deferred tax assets and liabilities are measured using the
tax rates and tax laws that have been enacted or substantively enacted
by the Balance Sheet date. At each Balance Sheet date, the group
reassesses unrecognized deferred tax assets, if any.

Current tax assets and current tax liabilities are offset when there is
a legally enforceable right to set off the recognized amounts and there
is an intention to settle the asset and liability on a net basis.
Deferred tax assets and deferred tax liabilities are offset when there
is a legally enforceable right to set off assets against liabilities
representing current tax and where the deferred tax assets and the
deferred tax liabilities relate to taxes on income levied by the same
governing taxation laws.

K. GOVERNMENT GRANTS:

Grants are accounted for where it is reasonably certain that the
ultimate collection will be made.

Grants relating to Fixed Assets are shown as deduction from the gross
value of the fixed assets and those of the nature of Project Capital
Subsidy are credited to capital reserve.

L. BORROWING COSTS:

Borrowing cost attributable to the acquisition and construction of
qualifying fixed assets are capitalized as part of the cost of such
asset up to the date when such asset is ready for its intended use.
Other borrowing costs are charged to the Profit & Loss Account.

M. CONTINGENT LIABILITIES / ASSETS AND PROVISIONS

Contingent Liabilities in respect of show cause notices received are
considered only when they are converted into demands. Contingent
Liabilities under various fiscal laws include those in respect of which
the Company / Department is in appeal. A provision is made based on a
reliable estimate when it is probable that an outflow of resources
embodying economic benefits will be required to settle an obligation.
Contingent Liabilities are disclosed in notes to financial statements.
Contingent assets are neither recognized nor disclosed in the financial
statements.

N. EARNING PER SHARE

Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
Earnings considered in ascertaining the company''s earnings per share
are the net profit or loss for the period after deducting preference
dividends and any attributable tax thereto for the period.

The weighted average number of equity shares outstanding during the
period and for all periods presented is adjusted for events, such as
bonus shares, other than the conversion of potential equity shares that
have changed the number of equity shares outstanding, without a
corresponding change in resources. For the purpose of calculating
diluted earnings per share, the net profit or loss for the period
attributable to equity shareholders and the weighted average number of
shares outstanding during the period is adjusted for the effects of all
dilutive potential equity shares.

Mar 31, 2010

A. GENERAL:

The financial statements are prepared on historical cost basis (except
for revaluation of certain fixed assets) in accordance with applicable
Accounting Standards issued by the Companies (Accounting Standards)
Rule, 2006, relevant provision of the Companies Act, 1956 and on the
accounting principles of a going concern. The Company follows the
mercantile system of accounting and recognises income and expenditure
on accrual basis except those with significant uncertainties.

B. USE OF ESTIMATES:

The preparation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires Management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosures of contingent liabilities or the
date of financial statements and reported amounts of revenue and
expenses for that year. Actual results could differ from these
estimates.

C. REVENUE RECOGNITION:

Revenue from sale of goods is recognised when significant risks and
rewards of ownership are transferred to the customers. Sales are net of
sales returns, trade and other discounts.

D. INVENTORIES:

i. Inventories are valued at lower of the cost and net realizable
value. Cost is assigned on weighted

average basis. Obsolete, defective and unserviceable stocks are
provided for.

ii. Finished goods and work-in-process include costs incurred in
bringing the inventories to their present location and condition.

E. FIXED ASSETS AND DEPRECIATION:

i. Fixed Assets are stated at cost except Land, Building and Plant &
Machinery which were revalued on 30th June, 1994 and are stated at
revalued cost less depreciation, wherever applicable.

ii. Depreciation on assets is provided on Written down Value method at
the rates and in the manner specified in Schedule XIV to the Companies
Act, 1956.

iii. Depreciation on machinery spares of the nature of capital spares
and having irregular use is provided prospectively over a period, not
exceeding the useful life of the asset to which they relate.

iv Depreciation on Fixed Assets added / disposed of during the year, is
provided for on pro-rata basis with reference to the month of addition
/ disposal / discarding.

F. CAPITAL WORK-IN-PROGRESS:

Expenditure related to and incurred during implementation of expansion
cum modernisation projects are included under Capital Work-in-Progress
and the same are capitalised under the appropriate heads on completion
of the project.

G. IMPAIRMENT OF ASSETS :

In accordance with AS 28 on Impairment of Assets issued by the
Institute of Chartered Accountants of India, where there is an
indication of impairment of the Companys assets related to cash
generating units, the carrying amount of such assets are reviewed at
each balance sheet date to determine whether there is any impairment.
The recoverable amount of such assets is estimated as the higher of its
net selling price and its value in use. An impairment loss is
recognised whenever the carrying amount of such assets exceeds its
recoverable amount. Impairment loss is recognised in the profit and
loss account. If at the balance sheet date there is any indication that
a previously assessed impairment loss no longer exists, then such loss
is reversed and the assets are restated to that effect.

H. TRANSACTIONS IN FOREIGN CURRENCY:

Transactions in foreign currency are recorded at the rate of exchange
in force on the date of transactions. Current assets, current
liabilities and borrowings denominated in foreign currency are
translated at the exchange rate prevalent at the date of the Balance
Sheet. The resultant gain/loss are recognized in the Profit & Loss
Account, except in cases where they relate to the acquisition of fixed
assets in which case they are adjusted to the carrying cost of such
assets.

I. EMPLOYEE BENEFITS:

i. Contribution to Provident and Family Pension Funds are funded as a
percentage of salary/ wages.

ii. Gratuity liability at the year end is funded as per group gratuity
scheme of Life Insurance Corporation of India.

iii. Leave entitlement liability at the year end is provided for on
the basis of leave rules of Company.

J. INCOME TAX:

i. Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961.

ii. The deferred tax for timing differences between the book and tax
profits for the year is accounted for using the tax rates and laws that
have been substantively enacted as of the balance sheet date.

iii. Deferred tax assets arising from timing differences are
recognized to the extent there is virtual/ reasonable certainty that
these would be realized in future.

K. GOVERNMENT GRANTS:

i. Grants are accounted for where it is reasonably certain that the
ultimate collection will be made.

ii. Grants relating to Fixed Assets are shown as deduction from the
gross value of the fixed assets and those of the nature of Project
Capital Subsidy are credited to capital reserve.

L. BORROWING COSTS:

Borrowing cost attributable to the acquisition and construction of
qualifying fixed assets are capitalised as part of the cost of such
asset upto the date when such asset is ready for its intended use.
Other borrowing costs are charged to the Profit & Loss Account.

M. CONTINGENT LIABILITIES / ASSETS AND PROVISIONS

Contingent Liabilities in respect of show cause notices received are
considered only when they are converted into demands. Contingent
Liabilities under various fiscal laws include those in respect of which
the Company / Department is in appeal. A provision is made based on a
reliable estimate when it is probable that an outflow of resources
embodying economic benefits will be required to settle an obligation.
Contingent Liabilities are disclosed in notes to accounts. Contingent
assets are not recognised or disclosed in the financial statements.

Mar 31, 2009

A. GENERAL:

The financial statements are prepared on historical cost basis (except
for revaluation of certain fixed assets) in accordance with applicable
Indian accounting standards and on the accounting principles of a going
concern. The Company follows the mercantile system of accounting and
recognises income and expenditure on accrual basis except those with
significant uncertainties.

B. USE OF ESTIMATES:

The preparation of financial statements in conformity with Generally
Accepted Accounting Principles (GAAP) requires Management to make
estimates and assumptions that affect the reported amounts -of assets
and liabilities and the disclosures of contingent liabilities on the
date of financial statements and reported amounts of revenue and
expenses for that year. Actual results could differ from these
estimates.

C. REVENUE RECOGNITION:

Revenue from sale of goods is recognised when significant risks and
rewards of ownership are transferred to the customers. Sales are net of
sales returns, trade and other discounts.

D. INVENTORIES:

i. Inventories are valued at lower of the cost and net realizable
value. Cost is assigned on weighted average basis. Obsolete, defective
and unserviceable stocks are provided for.

ii. Finished goods and work-in-process include costs incurred in
bringing the inventories to their present location and condition.

E. FIXED ASSETS AND DEPRECIATION:

i. Fixed Assets are stated at cost except Land, Building and Plant &
Machinery which were revalued on 30th June, 1994 and are stated at
revalued cost less depreciation, wherever applicable.

ii. Depreciation on assets is provided on Written down Value method at
the rates and in the manner specified in Schedule XIV to the Companies
Act, 1956.

iii. Depreciation on machinery spares of the nature of capital spares
and having irregular use is provided prospectively over a period, not
exceeding the useful life of the asset to which they relate.

iv. Depreciation on Fixed Assets added / disposed of during the year,
is provided for on pro-rata basis with reference to the month of
addition / disposal / discarding.

F. CAPITAL WORK-IN-PROGRESS:

Expenditure related to and incurred during implementation of expansion
cum modernisation projects are included under Capital Work-in-Progress
and the same are capitalised under the appropriate heads on completion
of the project.

G. IMPAIRMENT OF ASSETS :

In accordance with AS 28 on Impairment of Assets prescribed by
Companies (Accounting Standards) Rules, 2006, where there is an
indication of impairment of the Companys assets related to cash
generating units, the carrying amount of such assets are reviewed at
each balance sheet date to determine whether there is any impairment.
The recoverable amount of such assets is estimated as the higher of its
net selling price and its value in use. An impairment loss is
recognised whenever the carrying amount of such assets exceeds its
recoverable amount. Impairment loss is recognised in the profit and
loss account. If at the balance sheet date there is any indication that
a previously assessed impairment loss no longer exists, then such loss
is reversed and the assets are restated to that effect.

H. TRANSACTIONS IN FOREIGN CURRENCY:

Investments in foreign entities are recorded at the exchange rate
prevailing on the date of making the investment. Transactions in
foreign currencies are recorded at the rates prevailing on the date of
transaction. Monetary items denominated in foreign currency are
restated at the rate prevailing on the balance sheet date.

I. EMPLOYEE BENEFITS:

i. Contribution to Provident and Family Pension Funds are funded as a
percentage of salary/ wages.

ii. Gratuity liability at the year end is funded as per group gratuity
scheme of Life Insurance Corporation of India.

iii. Leave entitlement liability at the year end is provided for on
the basis of leave rules of Company.

J. INCOME TAX:

i. Provision for current tax is made on the basis of estimated taxable
income for the current accounting year

in accordance with the Income Tax Act, 1961.

ii. The deferred tax for timing differences between the book and tax
profits for the year is accounted for using the tax rates and laws that
have been substantively enacted as of the balance sheet date.

iii. Deferred tax assets arising from timing differences are
recognized to the extent there is virtual/ reasonable certainty that
these would be realized in future.

iv. The provision for Fringe Benefit Tax has been made in respect of
employee benefits and other specified expenses as determined under the
Income Tax Act, 1961.

K. GOVERNMENT GRANTS:

i. Grants are accounted for where it is reasonably certain that the
ultimate collection will be made.

ii. Grants relating to Fixed Assets are shown as deduction from the
gross value of the fixed assets and those of the nature of Project
Capital Subsidy are credited to capital reserve.

L. BORROWING COSTS:

Borrowing cost attributable to the acquisition and construction of
qualifying fixed assets are capitalised as part of the cost of such
asset upto the date when such asset is ready for its intended use.
Other borrowing costs are charged to the Profit & Loss Account.

M. CONTINGENT LIABILITIES / ASSETS AND PROVISIONS

Contingent Liabilities in respect of show cause notices received are
considered only when they are converted into demands. Contingent
Liabilities under various fiscal laws include those in respect of which
the Company / Department is in appeal. A provision is made based on a
reliable estimate when it is probable that an outflow of resources
embodying economic benefits will be required to settle an obligation.
Contingent Liabilities are disclosed in notes to accounts. Contingent
assets are not recognised or disclosed in the financial statements.